Option C involves reviewing the current blocklist and prioritizing it based on the level of threat severity, adding the domains with the highest severity and removing the lower-severity threats. While this approach might help in prioritizing the blocklist, it doesn't necessarily address the issue of an overgrown blocklist and the limitations of the existing technologies.
The challenge described in the scenario is that the ACLs are at maximum, and the IPS signatures have limited space for domains. Prioritizing based on threat severity might help in focusing on the most critical threats, but it doesn't directly address the issue of the blocklist exceeding the capacity of the existing controls.
Option D, on the other hand, directly addresses the overgrown blocklist by reviewing and removing domains that are no longer necessary or pose lower risks. This action helps optimize the use of ACLs and IPS signatures, leading to improved performance without compromising security.